For mortgages, it's the best of times and worst of times

Brooklyn-born Joe Gross, 41, knows the home mortgage game. Ever since graduating from Touro College in New York with a degree in accounting in 1999 he has immersed himself in one end of the business or another. He’s worked for somebody else, he’s worked for himself, he was there when the subprime lending craze surged, he was there when it crested and he was there when it crashed. He’s given seminars on the do’s and don’ts of mortgage shopping and for a time had his own radio show.

In the process he has become "The National Mortgage Expert" — with the website to prove it: thenationalmortgageexpert.com. On his blog he dispenses advice, observations, hope and caution in equal measure. Joe knows mortgages.

He’s also written a book about where he’s been and what he’s learned, called “How the Greed of Wall Street and Your Mortgage Lender are Destroying America’s Credit.” The book’s content is decidedly more upbeat than the title, with multiple tips about effectively negotiating the current system.

Joe agreed to have a conversation with the Deseret News about his view of the state of things in America’s mortgage industry.

DN: Thanks for sitting down and talking with us. Do you see 2013 as the best of times or the worst of times when it comes to acquiring a mortgage?

JG: I’d say it’s both.

DN: Please elaborate.

JG: Based on the latest data the economy is pretty scary on the one hand. The employment numbers aren’t improving and the housing market does not look like it’s turned the corner yet. It’s hard to get a loan. On the other hand, if you can qualify, it is an excellent time to buy a home. That’s true for two reasons. Prices are low and interest rates are low — a very good combination. I believe home ownership is still living the American dream. But you want to make sure it’s an investment and not a burden.

DN: How do you make sure of that?

JG: Education is always my favorite ingredient when it comes to mortgages. Take the time to learn what’s going on and what’s required. When you understand the process and what’s needed, you will have a much easier time and a much less frustrating time. Now, more than ever, it’s important to be prepared and avoid unrealistic expectations. The requirements are more strict than they were. Good credit (rating), collateral and income are all needed to qualify for a mortgage. If you have those in good order you’ll get the loan. If you don’t, you won’t. So if you know going into the transaction that you need a good credit score to get a mortgage, then you know the initial goal isn’t the mortgage, it’s the good credit score. Make sure of that first. A few years ago you could get the loan if your credit wasn’t good, you just had to pay more. But that’s not the case anymore. The same goes for income and collateral. Look at your situation and know the qualifications before you apply and you will avoid a lot of frustration.

DN: And if you put yourself in a position to qualify, what then?

JG: Be aggressive and take action. Don’t be discouraged by what people are saying and the predictions of doom and gloom. Look at your individual economy. There’s an individual economy and there’s economy as a whole. If the whole is in trouble, sometimes that provides the best opportunities. Now is the time. Two-three years from now you’re going to look back and say I could have picked that up! and regret that you didn’t make the move. You can definitely use the down market to your advantage. There is absolutely a lot of opportunity right now.

DN: So there’s a light at the end of the tunnel?

JG: There’s always a light. It’s just a matter of time. If rates stay low, the light at the end of the tunnel is going to be far, far away. Unemployment has to change and the economy has to turn. When is that going to happen? That is the million-dollar question. I’m hoping within another year, although I cannot predict what the effect will be of Obamacare, which will be implemented in 2014.

DN: Thank you for your thoughts Joe. Any final tips?

JG: Live within your budget and plan ahead. It goes back to the old basics, you know, when times are not that predictable and the economy is not as good as it needs to be. You have to know your budget. Most people don’t. They just live. Sit down, figure out what your income is, have a reserve fund if you have something extra, and budget accordingly. Make a strategy for where you want to be and you can get there.